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The Daily Missive

Powerball & The Milkshake Theory

By November 4, 2022February 8th, 2023No Comments

“My milkshake brings all the boys to the yard.”
— Kelis, American singer

The Powerball jackpot is now up to $1.6 billion dollars. It will be the single largest sum ever doled out by the Multi-State Lottery Association.

What would one do with such an egregious amount of paper dollars? You can write in your wildest dreams here.

It’s not a trick question. Of course, most of the money goes to the government– after a back of the envelope calculation… if there is one winner and he/she were to take the lump sum, $187.8 million would be withheld for federal taxes. Who knows what the state and local school board or Boy Scout chapter would take.

There are interesting facts about those who win the lottery.

Click here to learn more

Devon hairdresser Mandy Williams celebrates her £1.6 million lottery win with husband Alan. (Source: Montage Communications)

It’s what’s known as the “curse of the lottery.” A Kentucky man who claimed a $21 million prize in 2001 and lost it all by 2006… A West Virginia man whose daughter and granddaughter died of heroin overdose after he won $315 million dollars in 2002.

An oft-cited statistic by the National Endowment for Financial Education (NEFE) claims that 70% of people who suddenly receive a windfall will lose all of it within just a few years. In January 2018, the NEFE publicly admitted the statistic was not, in fact, backed up by any of their research.


“What’s this got to do with our investments, Wiggin?” you might ask. “After all, this is money we don’t have!”

You’re right. But it’s Friday so, bear with me.

There is something to learn from the psychology of lottery winners, no matter how catercorner it seems to be. Especially at the tail end of the longest bull market in history – 2009-2020.

Brent Johnson, CEO at Santiago capital, went viral earlier this year for what he calls “The Milkshake Theory of the Dollar.”

He argues that global central banks injected QE liquidity into the “milkshake” of the global market– much like a lottery winner suddenly airdropped a ton of cash– that made the market rosy-eyed and led a lot of investors to think they were geniuses.

Now the swill of interest rate hikes, Bidenomics and green energy policy, the American empire of debt and credit, and the ever-growing United States military have “swapped out that syringe for a straw.”

The theory envisions a scenario where the US dollar sucks up liquidity from other currencies worldwide. Hence the strong dollar.

Like a too-stunned-to-speak jackpotter however, the money is flowing for all the wrong reasons. When the dollar strengthens, as the dollar index indicates it has, that means foreign revenues for corporations are making the gurgling sound at the bottom of the paper cup. Lower earnings for Dow and S&P 500 companies are just one reason the stock market is such a bummer to talk about.

But, maybe the “milkshake theory” will be a fun way to explain to your friends and family this weekend why their Fidelity brokerage account has dropped so low YTD.

Addison Wiggin

Addison Wiggin Addison Wiggin is an American writer, publisher, and filmmaker. He was the founder of Agora Financial and publisher for 18 years. An acclaimed New York Times best-selling author, his books include: Financial Reckoning DayEmpire of DebtThe Demise of the Dollar, and The Little Book of the Shrinking Dollar. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by The Essential Investor, in March 2020. He films from a homegrown studio in his basement.